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Rupee depreciates on dollar buying

03 Oct 2017 Evaluate

Indian rupee depreciated against the US dollar on Tuesday, as the greenback took on more strength overseas. Sentiments remained down-beat with Fitch Ratings in its latest report trimming India’s economic growth forecast for the fiscal year 2017-18 by half a percentage point to 6.9% from 7.4% after the GDP growth unexpectedly faltered in the April-June quarter. Investors even overlooked the report that manufacturing activity in India showed a modest improvement in September supported by increases in both output and new orders. The Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, remained unchanged at 51.2 in September. However, a strong domestic equity market prevented the rupee from falling further. On the global front, dollar climbed for a second consecutive day on Tuesday as a strong reading for US manufacturing activity pushed bond yields higher, prompting investors to trim some of their extreme short bets against the greenback.

Finally, the rupee ended at 65.50, 23 paise weaker from its previous close of 65.27 on Friday. The currency touched a high and low of 65.63 and 65.46 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at 65.55 and for Euro stood at 76.77 on October 03, 2017. While the RBI's reference rate for the Yen stood at 57.97, the reference rate for the Great Britain Pound (GBP) stood at 86.87. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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